In a recent decision in Novak v. Mutual Benefit Insurance Company, No. 1592 MDA 2021 (Oct. 14, 2022), the Superior Court clarified the Supreme Court decision in Erie Insurance Exchange v. Bristol, 174 A.3d 578 (Pa. 2017), to clarify the validity and proper calculation of time for statute of limitations defenses in UM/UIM claims in Pennsylvania.

In Novak, the claimant was involved in a fatal accident while operating a motorcycle. His estate made tort claims against the tortfeasor and separate claims for underinsured motorist benefits (“UIM”) under the policy insuring the motorcycle and, separately, under a household policy issued by Appellee, Mutual Benefits Insurance Company (“MBIC”) that listed him as a named insured. Following resolution of the tort claim as well as the UIM under the motorcycle policy, the claimant wrote to MBIC seeking consent to settle. On October 3, 2012, MBIC notified the claimant that its consent was not required, as the motorcycle operated by claimant at the time of the accident was not insured by MBIC and, therefore, no UIM coverage was available under its policy via the “household exclusion.” The claimant’s estate settled the UIM claim under the motorcycle policy in August 2017 and subsequently made a claim to MBIC for UIM coverage. MBIC denied coverage, citing their October 2012 denial of coverage. The claimant’s estate filed a breach of contract Complaint in May 2019 and MBIC, in turn, filed a motion for summary judgment arguing, inter alia, that Appellants’ claims were barred by the statute of limitations. The trial court granted MBIC’s motion, finding Appellants did not file their lawsuit within the four year statute of limitations for UM/UIM claims.

On appeal, Appellants argued the trial court erred in determining the statute of limitations started to run with MBIC’s October 2012 letter. Instead, Appellants urged that the statute of limitations did not begin to run until they presented a claim to MBIC for UIM benefits in August 2017 following resolution of the underlying claims against the tortfeasor and the first priority UIM carrier. Appellants essentially asked the court to distinguish between denial of coverage and denial of a claim. The Superior Court found that the trial court did not err in its decision, holding that it was indisputable that the Pennsylvania Supreme Court’s decision in Bristol held that the statute of limitations in UM/UIM cases “begins to run upon the denial of coverage (as well as upon the denial of a claim or a refusal to arbitrate). The Novak Court noted that the insurer’s October 2012 letter unequivocally communicated that no coverage for the claim was available. Said interpretation of the letter was even conceded at argument by Appellants’ counsel. Any suit filed more than four (4) years after said denial is time barred. The trial court’s decision was affirmed, accordingly.

The Novak decision can be found here.

For additional questions, please contact Glen Shikunov, Esq. and/or Scott Tredwell, Esq.

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